by Dale Sproule
On the surface, Canada has a thriving hemp industry – with over twenty large-scale commercial producers currently growing medical marijuana for a customer base of over 35,000 licensed users. And then there are hundreds and hundreds of aspiring “farmers” with dollar signs in their bloodshot eyes – dreaming of getting in early to take advantage of an industry that is clearly poised to become massive.
Health Canada told the Globe and Mail last summer that they were receiving an average of 25 applications a week (an extremely small percentage of which will ever get licenses to become producers) – and they projected that the number of patients using medical marijuana could easily blossom to over 400,000 within the next ten years.
Then again, instead of becoming massive, the “industry” could well just sink back into the rocky ground from which it sprung – a crop blighted by a frosty political climate. The only thing that’s truly certain about the marijuana industry is its uncertainty. The Conservative government has made no secret of their antipathy towards the entire sector and no one can deny the stigma from decades of illegality and bad press, still floating in the air like a haze after a memorable and unruly rock festival.
Medical marijuana producers are continuing to encounter well-documented difficulties marketing their products, with traditional advertising strictly forbidden – as are most other tried and true marketing methods. The industry is heavily regulated and perpetually scrutinized – so even with the experience, facilities, investors, credentials and a winning business plan, a company could end up falling on their face after a single misstep.
Possibly, the smartest companies and savviest investors are the ones who follow the old adage – “don’t put all your eggs in one basket.” In fact – the varieties of different baskets being created may surprise and delight you.
Building a Market from the Ground Up
Vancouver’s Abattis Bioceuticals Corp. has made a point of diversity from the beginning. It developed what it calls “an innovative GDERS (grow, dry, extract, refine, sell) strategy spanning the entire industry supply chain from seed to sale.” By operating a number of subsidiaries and working with a wide range of partners, it has put itself in a position where failure in any one area is extremely unlikely to bring down the entire company – but where profits coming from several different streams at the same time can funnel inward to help support the rest of the infrastructure.
“At the end of the day, we know that we only have so much bandwidth,” says Abattis CEO, William (Bill) Fleming. “It’s all about understanding what you have now and how you can monetize it. There’s so much shifting sand in the market that you have to be very careful about where you start building your foundations.”
The company’s current subsidiaries and partnerships include:
BioCube provides controlled cannabis cultivation environments for high yield marijuana growing; North American Bioextracts Inc. plans to use proprietary extraction technologies to develop customized THC extract oils and CBD extract oils;
Phytalab performs testing services under Washington State’s Initiative 502;
Instant Payment Systems enables patients to make payments through electronic means
And those are just a few of its many arms. The company also has subsidiaries awaiting approval to become licensed producers under Canada’s new Marijuana for Medical Purposes Regulations (“MMPR”) program.
But with all that going on, Fleming insists “We believe that botanical is the next new wave of pharmacy. Right now within the industry, you look at the big pharmaceutical companies and everything that they’re doing today has been chemically synthesized, so consequently, they haven’t been doing much on the botanical side.”
One of the best things to come out of the softening of the regulatory environment, is the growing body of pharmaceutical and nutraceutical research that is now able to be done on cannibinoids.
“Since cannabis has always been a schedule one drug, there hasn’t been much research and development, because you weren’t permitted to do it,” says Fleming. “Even now, in order to really get in and be compliant for doing research and development and building an intellectual property around a cannabis based type platform you have to ensure that you conform to the regulations and guidelines (in whatever part of the world you’re operating). For example, in Canada if you’re going to do any kind of research and development with cannabis based products, then you need to have a controlled substance license.”
Another of the Abattis subsidiaries – and the one that has been getting the most press for the last six months – is called BioCell Labs Inc. and is involved with research and development of nutraceutical products. They have been developing a line of phytocannabinoid formulas which include ECS Supreme, a functional beverage rich in phytocannabinoids. ECS Supreme is based in Canadian saskatoon berries and contains Abattis’ patented nitric oxide blend. Bio-cell simultaneously introduced seven other condition-specific cannabinoid formulas to address everything from nausea to anxiety to traumatic brain injury.
There are over 150 compounds – including at least 85 different cannabinoids – which exhibit a vast range of properties and effects – that can be isolated from cannabis – and only one of them is renowned for its psychoactive properties. “But it’s the THC that is the issue,” Fleming admits, “because one of those 150 compounds just happens to be THC.”
While most of the Abattis/Biocell products are still in development and as yet unavailable to buyers or retailers, it is just one of dozens of Canadian companies with at least one foot in the cannabis patch.
The Marijuana Market is Looking Good
Easton Pharmaceuticals is an established and successful specialty pharmaceutical company that previously owned an FDA approved wound healing drug and currently produces topically-delivered drugs and therapeutic/cosmetic healthcare products focused on cancer and other health issues geared towards female sexual dysfunction, wound healing, pain, motion sickness and other conditions that are all in various stages of development. Easton designs, develops and markets a range of premium therapeutic health care products. Using a proprietary gel formulation, their transdermal delivery system allows for the targeted delivery of active ingredients – vitamins, herbs and homeopathic remedies – through the skin to the underlying tissue. They have products that help with various conditions including: female sexual dysfunction, scars, stretch marks, cellulite and varicose veins.
Easton Pharmaceuticals has ventured into the potentially lucrative medical marijuana industry through an investment into AMFIL Technologies and their groZONE anti-bacterial system and the exclusive option to purchase up to 50% in a medical marijuana grow-op business / facility which has received a letter to build from Health Canada. The company’s gel formulation is thought to be an innovative and unique transdermal delivery system that can in the future be adaptable in the delivery of Cannabidiol extracts.
The push to look better, feel better and live longer healthier lives has helped Easton Pharmaceuticals Inc. execute a distribution and intellectual property agreement for its full range of OTC therapeutic and specialty products with NutraShop Global Stores, Inc. currently serving thousands of trusting online customers looking for Quality Life Wellness Products.
In addition to distributing Easton’s OTC proprietary therapeutic products – including a cosmetic grade anti-aging serum, pain relief gel and a female health product, Nutrashop has acquired rights and access to Easton’s transdermal delivery system and formulations that are to be utilized in new products being jointly developed, one of which includes a new children’s topical product containing exotic active ingredients to treat certain skin conditions.
Hemp is Not the Same as Marijuana
For decades, the stigma of marijuana tightened the regulatory environment across North America to the point where growing hemp for food, fabric or any other purpose became next to impossible. When Robert Rae and Wally Venechuk founded Canada Hemp Foods in 2006 they did some research and discovered that industrial hemp had once been one of the largest and most important crops on the planet. It was only when leaders of competing industries like lumber and plastics decided, as a marketing tactic, to demonize the plant by associating it with its distant cousin, marijuana, that hemp fell out of favour. When laws were enacted to prevent the cultivation and use of marijuana, the same laws applied to industrial hemp despite the fact that it contained no psychotropic substances. Ostensibly, the concern was that growing hemp could conceal a much more nefarious crop being grown on the same land.
But the two men were so enamoured with the healing properties that they had unearthed in hemp that they were ready to run the gauntlet to make their dream happen.
Nine years later, Canada Hemp Foods is expanding their presence in grocery stores and specialty shops with a new distributor for their Canadian hemp hearts and oils products. Dovre Import & Exports, based in Richmond BC. Currently delivering award-winning specialty foods to restaurants, specialty grocers and grocery chains across Western Canada, the distributorship brings Canada Hemp Foods products into a growing list of locations.
“Hemp hearts and oils are a foundational nutritional source of Super Omega-3 and Super Omega-6, are GMO Free and 100% THC free, and offer a rich source of digestible protein, perfect for the vegan diet,” explains Canada Hemp Foods co-founder Robert Rae, who is very happy with the new distributorship. “Not only does this agreement get our products into a wonderful group of stores and specialty shops, it also carries a social return, one of our key values as a company.”
Dovre supports causes such as the Vancouver Union Gospel Mission, Food Banks and the United Way.
Canada Hemp Foods products can be purchased online via their e-commerce store, and full information on the benefits of hemp can be found in the Hemp 101 section.
Crossing Borders, Boundaries and the Ts on All the Contracts
Just a few short months ago, Naturally Splendid announced strengthened relationships with Full Spectrum Laboratories (FSL) and Boreal Technologies, with a recent application to the U.S. Patent Office for co-ownership of HempOmega™ patents that will give Naturally Splendid their own omega technology.
VP of Operations, Bryan Carson states, “We are most fortunate that the technologies developed by Boreal Technologies, are multi-dimensional in that the omega extraction and formulation technology is similar to the cannabinoid extraction and formulation technology. This allows Naturally Splendid to penetrate the lucrative global omega market (estimated at $35 billion annually) where there are no regulatory issues, while the regulatory environment for cannabinoid technologies and products continues to evolve.”
Naturally Splendid’s 100% owned NATERA™ line of hemp-based superfood products includes natural and flavored shelled hemp seeds as well as natural and flavored hemp protein powders and is carried nationwide by leading health food distributors and a network of retail stores across Canada.
Naturally Splendid has an exclusive sales agreement to market and distribute, in North America, the full complement of patent pending, plant-based omega products created by Boreal Technologies including HempOmega™, H2Omega™, FlaxOmega™, CanolaOmega™ and ChiaOmega™. They have also signed an agreement with Alberta’s Food Science and Technology Center to develop pet superfoods fortified with HempOmega™. But these weren’t the only opportunities to emerge from the recently acquired access to FSL technologies.
Naturally Splendid CEO Craig Goodwin reports, “One of the opportunities in front of us is the potential to biosynthetically produce pharmaceutical grade cannabinoids without having to grow a single plant – thus potentially lowering the cost of production significantly, creating a competitive advantage over traditional extraction and formulation technologies. This technology may be applied in the development of food, beverage and nutraceutical/cosmetic products and eventually for pharmaceutical applications.”
Katie Schmitt, who came to Naturally Splendid through Boreal Technologies, will be directly involved in the transfer of technological expertise obtained under the agreement from FSL and implementation of commercialization strategies. She says, “FSL has filed a patent application covering the organic and enzymatic synthesis of cannabinoids. This technology will allow for industrial scale production of cannabinoids catalyzed from Cannbigerolic acid (CBGa) without the requirement to grow large quantities of plants. The process mimics the natural synthesis that occurs in the plant’s bio-pathway. Cannabinoids produced in the bioreactor are pharmaceutical grade purity and devoid of by-products and impurities. The largest advantages with this technology over existing methods of cannabinoid production (natural and synthetic) are: its low price per unit manufacturing costs (potentially 1/10th to 1/3rd the cost of existing methods); its ability to produce a diversity of products from a single manufacturing line; and commercial scalability. It also creates access to lesser known cannabinoids for research and analysis of their potential therapeutic applications.
NSP will identify licensed partners in legal jurisdictions that it can collaborate with to develop safe and efficacious cannabinoid therapies utilizing this technology. Potential therapeutic applications include: analgesic to relieve pain; antibacterial to slow bacterial growth; anti-inflammatory to reduce inflammation systemically; and anti-proliferative – which may inhibit cancer cell growth through apoptosis.
